Leadership is a precious commodity in all businesses and none more so than the hotel industry. U.S. lodging companies are constantly innovating in every area of the business — from franchising and development to customer service and technology. This month, Lodging Hospitality honors eight hotel chains for their innovation, creativity and leadership with the third annual Chain Leadership Awards.
FRANCHISE RELATIONS: DAYS INN
The right way to lead a franchise organization is through continual face-to-face contact with your customers, the licensees. That's been the successful operating philosophy for Joe Kane, the long-time president of Days Inn, the 1,900-property giant in the Cendant Hotel Group portfolio.
At the beginning of 2004, Kane and his brand management team set off on a six-city road tour to meet and confer with more than 1,700 Days Inn owners and GMs. According to Kane, the Sunsational Summit Meetings had two clear and concise goals: “First, we wanted to share with our franchisees the details of our multi-year strategic plan for the brand,“ says Kane. “As a key part of the plan, we had a goal to increase system RevPAR by between three and five percent during '04. We knew we had to get out into the field early in the year to enable our franchisees to meet that goal.“
The intense two-day meetings included seminars on understanding electronic distribution, new methods of rate forecasting and rate management techniques. Two two-hour Q-and-A sessions gave franchisees ample opportunity to voice their concerns and to get answers to questions on the revenue program, the brand's strategic plan or anything else on their minds.
At the completion of the meetings, attendees received a workbook and revenue commitment card to sign and return to Days headquarters. The results justified the effort: year-over-year RevPAR rose by 4.8 percent and Days has beaten the economy segment in RevPAR performance for 19 straight months. Kane's goal for this year is an ambitious 7.4-percent boost in RevPAR.
Kane's face-to-face philosophy is nothing new. In 2003, he and his executive team took to the road to visit 225 properties to share ideas and listen to franchises. That dialogue helped the chain create its strategic plan and led to the round of RevPAR meetings early last year. Kane is currently on the road reinforcing the chain's revenue-building message.
At the close of the recent Days Inn conference, each franchisee received a desktop piece called Soul of the Brand. “It serves as a daily reminder of the brand's goals for 2005 as well as our guiding principles, or soul of the brand,“ says Kane.
Another recent idea from the always-innovative Kane was the QuickVue Translation Guide. Working with a Cendant Hotel Group task force and with the MultiCultural Foodservice & Hospitality Alliance, the company produced an 80-page guide that converts many hospitality industry terms from English and Gujarati, the native language of many Cendant franchisees, to Spanish. All Cendant properties will receive the guide, and the company donated 3,500 copies to the Asian-American Hotel Owners Association for distribution at its annual conference this month.
DEVELOPMENT: VALUE PLACE
Some people call Jack DeBoer a developer; others say he's a brand builder or perhaps a hotelier. Longtime associate Gina-Lynne Scharoun thinks the label “entrepreneur“ fits him the best.
“Jack has an incredible talent to identify niches that have been unnoticed or untapped by others and then develop them into successful business models,“ she says. “He's been doing it for many years, and to me that's the definition of an entrepreneur.“
The latest niche DeBoer hopes to exploit is actually a variation on a theme he's massaged several times before. Like other brands he created — Residence Inn, Summer-field Suites and Candlewood Suites — his new Value Place concept aims at the extended-stay lodging market. While he prefers to call it “short-term residential lodging,“ Value Place is a tightly calibrated concept that provides high value for guests and what he hopes are excellent returns for his franchisees.
“We took the best of the lodging industry and the best of the apartment business and blended them together,“ says DeBoer. “The mid-priced lodging business — everything from Super 8 to Courtyard — has become a commodity quicker than I thought it would. And since the purchase of commodities is based solely on price, you can only make incremental differences in your product. We knew to succeed we had to create something that produces incredible value, both for guests and for owners.“
In studying the market, DeBoer and his team created a set of parameters in which the new product had to fit: a development cost of $30,000 per key; annual operating expenses of $275 per room; an average rate of around $150 per week; and great returns to developers. The result was Value Place, a new-construction, four-story building that can be built in five months. Once open, the businesses adhere to the four guiding principles of simple, safe, low-cost and clean. Without a 24-hour front desk and housekeeping only every two weeks, it takes just four full-time employees to operate the property.
The market is the prototypical tweener: those people between jobs, homes or marriages, plus the usual cadre of construction crews and other workers on short-term assignment. Typically, the guest is paying his own way, and average length of stay is 62 days.
So far, two company-owned properties are open and operating, 20 more are under development, and franchise sales are under way in 47 states. Scharoun says the franchise sales effort goes beyond just the typical lodging owner. “We're targeting developers of all types but also those who have a common thread of entrepreneurship and a desire to be in a business on the ground floor,“ she says. “About half will be entrepreneurs/developers, about a quarter existing hotel owners and the rest owners of public storage facilities.“
The company is securing contracts on about 10 sites a month, of which they'll offer six to eight to franchisees for development.
FRANCHISE RELATIONS: AMERICAS BEST VALUE INN
Changing the name of a brand, even slightly, can be a tricky thing. Beyond the costs involved, making the transition to a new identity often leads to dissension, mistrust and even hostility among franchisees and property owners. In contrast, last year's evolution of Best Value Inn to Americas Best Value Inn by Vantage occurred nearly seamlessly, with little or no dissent among the chain's substantial membership base. In fact, 98 percent of members voted to support the name change and overall direction of the brand. Even more telling, the unveiling of the new name and logo at last December's Best Value Inn conference provoked a spontaneous standing ovation from those members present.
“We've always been honest, upfront and straightforward with our members,“ says President & CEO Roger Bloss. “The process surrounding the name change was no different. We set the foundation, developed a plan and communicated it to our members as clearly as possible.“
In fact, the corporate leaders and members believe the name change allows the brand to reassess and enhance its growing stature in the lodging marketplace. The “Americas“ designation, for example, signifies its entry into Canada and Mexico.
The brand needed to change its name as the result of litigation with Best Western International. Faced with that mandate, Bloss and his partners took a proactive approach that included ideas from as many key members as possible.
At a dinner hosted by Bloss before the chain's '03 conference, nearly 75 members were able to discuss and offer insight into the brand change process. Following that session, the staff had nearly a year to develop the name, design a logo, register it and devise implementation and marketing plans to support the move.
TECHNOLOGY: INTERCONTINENTAL HOTELS GROUP
In the Wild West atmosphere of online hotel distribution, it's important for a brand company to guide owners and franchisees to practices that are beneficial to the properties, guests and the brand. That was InterContinental Hotels Group's motivation in standardizing how the company does business with online travel bookers.
In the travel business downturn following Sept. 11, 2001, many hotel companies turned to web portals like Expedia, Travelocity and Priceline to move their distressed inventory. While this new distribution channel created some incremental revenues for properties, it also created confusion and dissatisfaction for both consumers and hotel owners. IHG knew it had to step in.
“Our hotels' customers were beginning to complain about how they were treated by the third-party web bookers,“ says Jim Young, senior VP, global distribution. “They found prices to be confusing and all over the place. They sometimes didn't get the room they thought they reserved, and many of them didn't realize that they had to pay in advance.
“We were spending a lot of time and money to manage what was just two percent of our business. We knew we had to do something to protect the interests of our brands, our customers and our owners,“ he says.
Last April, the company boldly announced it would only do business with third-party intermediaries that meet four tough mandates. The sites must agree to:
End confusing and potentially unclear marketing practices;
Automate the booking process;
Clearly present taxes, surcharges and hidden fees to consumers;
Ensure the ability of hotels to comply with IHG's best rate available promise and their ability to manage online distribution channels during high-demand periods.
While risky, the move proved to be a good one, earning praise from owners and customers alike. Last August, IHG certified Travelocity as the only intermediary meeting all mandated criteria, effectively shutting out Expedia, hotels.com and Expedia Corporate Travel.
“We thought a couple of hundred properties in the system would opt out of the program, but only 60 have done so,“ says Young, in recounting the impact of the initiative. “We thought we would have a couple of hundred compliance issues; we've had two. We thought 15 or 20 hotels would leave the system; only one has done so.“
TIMESHARE: FAIRFIELD RESORTS
Even the highly successful timeshare business has shoulder seasons and slow periods. To help fill those gaps, Fairfield Resorts last year launched Play Days, a promotion designed to increase guest arrivals during traditionally lower occupancy periods. Companywide occupancy increased by six percent during last year's Play Days events, with some resorts reporting even greater increases.
The program, which began as a pilot at a handful of Fairfields, covers nine separate promotions this year during eight months of the year. Last year's promotion included Mother's Day and Father's Day events, a golf tour to seven Fairfield properties, arts and cultural tours, wine and culinary tours and a holiday shopping excursion. For the Mother's Day event, for example, activities included spa and massage treatments, yoga classes, organized walks and cooking classes.
The '05 Play Days calendar included Heart Healthy Valentine's Day, Bloom into Spring and Halloween Happenings weekends, in addition to the return of some popular programs from last year.
CUSTOMER SERVICE: MICROTEL INNS & SUITES
Microtel Inns & Suites has made great strides in accommodating travelers with disabilities. Last year, the chain realized sharp gains in bookings for ADA room nights across all distribution channels by nearly 250 percent over 2003, while net revenues for ADA room nights were up by more than 260 percent. Internet bookings for ADA rooms during the same period marked the strongest gains, with an increase of more than 400 percent, followed by bookings on GDS, which increased more than 360 percent.
Brand leaders attribute this growth to the increasing awareness of Microtel hotels among travelers with disabilities and the brand's ability to service this rapidly growing market.
First, Microtel offers three ADA-room designs and a consistency of service to fit guests' needs throughout the chain. All employees are trained in disability guest etiquette and “attitude accessibility“ with the Opening Doors program.
In addition, Microtel is proactively involved in several initiatives targeting the needs of travelers with disabilities. The brand is a sponsor of The Society for Accessible Travel & Hospitality (SATH) and Ms. Wheelchair Pennsylvania. It also participates in the annual World Congress & Exposition on Disabilities (WCD) and conducted a joint survey at the event regarding the needs of travelers with disabilities.
TECHNOLOGY: RADISSON HOTELS & RESORTS
Last fall, Radisson Hotels & Resorts launched Express Yourself, a program it claims is the hotel industry's first, new-generation online check-in process at all its hotels and resorts in the Americas. At the core of this new expedited hotel check-in process is the ability for guests to check in via the web at their convenience and provide preferences in advance of their arrival, eliminating a lengthy check-in process and providing more control over their hotel experience. The system was designed to support Radisson's new brand strategy, focused on identifying and enhancing key guest touch points and enabling choice.
Express Yourself features a three-step process. First, guests reserve a room via any Radisson booking process (website, call center, hotel direct or through a travel agent). Then, seven days prior to their visit, they receive an e-mail inviting them to “express“ themselves by checking in at the Radisson website (www.radisson.com). Personal preferences might include the request for a specific room location, high-speed Internet access, enrolling in the Gold Points Reward program, selecting an automated wake-up call time and requesting use of the hotel's complimentary airport shuttle service, if available.
Upon arrival, guests need only identify themselves at the front desk. They then promptly receive a key packet and hotel information — with no waiting and no hassles. Guests can utilize Express Yourself up until 6 p.m. on the day of arrival and at least two hours prior to check-in.
“Radisson is taking a bold step to transform what consumer research has consistently shown as the least desirable experience in the hotel stay — standing in line for a slow check-in or slow check-out,“ says Bjorn Gullaksen, Carlson Hotels Worldwide executive vice president and brand leader. “We will never replace the human element of a friendly front-desk person.“
OVERALL INNOVATION: MGM MIRAGE
Since May 2000, when MGM Mirage established the gaming industry's first formal, voluntary Diversity Initiative, diversity and inclusion have become strategic priorities internalized at the highest levels of MGM Mirage. Its goal has been and continues to be its motto: United Through Diversity.
As a declaration of its commitment to diversity, the company's board of directors in 2002 created a diversity committee to assist it in guiding the initiative as a strategic business imperative, engaging all aspects of the company's operations.
Through the committee, MGM Mirage expanded its diversity mission through several programs. Last March, the company kicked off its latest creation — the Diversity Awareness Launch that featured, among other things, an information booth set up at each of its eight properties in southern Nevada, Michigan and Mississippi. The booth provided an interactive presentation that engaged employees to learn more about the diversity message and practice it among their fellow Diversity Champions, who gave employees the opportunity to learn more about the company's diversity initiative through games, collateral materials and face-to-face conversations.
THE BIG IDEAS
Best of the Best
From more than 50 nominations in nine categories, the editors of Lodging Hospitality selected eight chains for its third annual Chain Leadership Awards. The winners:
Franchise relations — Days Inn for its constant face-to-face involvements with its franchisees.
Development — Value Place for designing and launching an all-new-construction chain in a new hospitality segment.
Franchise relations — Americas Best Value Inn for its nearly seamless transition to a new chain name.
Technology — InterContinental Hotels Group for boldly setting tight standards in which it does business with third-party Internet distribution companies.
Timeshare — Fairfield Resorts for its Play Days initiative to build occupancies during slow periods.
Customer service — Microtel for its focused efforts to accommodate travelers with disabilities.
Technology — Radisson Hotels for its chainwide launch of an innovative online check-in system.
Overall innovation — MGM Mirage for its diligent efforts to build diversity among its employee base, vendors and communities in which it operates.
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© 2014 Penton Media Inc.
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